Consumers’ Perceptions When Evaluating Brand Extensions in Relation to the Original Brand

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Title: Consumers’ perceptions when evaluating brand extensions in relation to the original brand Supervisor: Dr. Christopher May
Co-supervisor: Dr. Helen Inseng Duh
Student: Chuma Diniso
Submitted: 14 November 2008
Qualification: Master of Commerce (Management)
Institution: University of the Western Cape

1.1INTRODUCTION

New product introductions have always been a popular strategy for companies seeking to increase their market growth. According to Bhat, Holak and Reddy (1994: 243), this strategy has its limitation because the new product may not be accepted as 30% to 35% of new products fail in the market. To avoid this drawback, brand marketers use a brand strategy that attaches an existing brand name to a new product introduced either in a different or similar product category, through brand extension and line extension respectively (Fox , Swaminathan & Reddy, 2001: 1). The brand associations that consumers hold of original brands become important to marketers when extending brands because it is believed that these associations will be transferred to the extended brands and ultimately positive attitudes and feelings will be created toward these brands. Kasper, Strepp and Terblanche (2005: 273) assert that consumers use brand associations to help them process, organise, and retrieve information in memory and to aid them in making purchase decisions. Consumers can have different associations when evaluating brands. These can range from brands being perceived as reliable, high quality, user friendly, and value for money. The associations consumers have of an original brand name can either favourably or unfavourably influence the way in which they evaluate brand extensions. Therefore, it is important for marketers to be aware of factors that should be taken into consideration in order to extend brands successfully.

This study seeked to evaluate consumers’ attitudes towards three extended brands, namely, Nike camera, Nike socks, and Nike golf balls...
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